KAR Auction Services Stock Surges on Robust Quarterly Performance

Shares of KAR Auction Services (NYSE: KAR), now operating primarily as OPENLANE, Inc., are gaining momentum following a strong quarterly report. The company's strategic pivot to a digital, asset-light business model is delivering tangible results, with key financial metrics exceeding market expectations and demonstrating significant core business growth.

Market experts are taking note of the company's positive trajectory. Barclays recently initiated coverage on the stock with an "Overweight" rating. Furthermore, the Zacks Rank for KAR has been upgraded to #1, indicating a "Strong Buy" recommendation. This reflects growing confidence in the firm's earnings potential. Over the past three months, consensus estimates have been revised upward: revenue projections for fiscal 2025 have increased by 2.65%, while EPS forecasts have risen by an even more substantial 8.06%. The average analyst price target for the next twelve months stands at $31.90. The stock recently traded at $26.14, having advanced 6.74% over the preceding two weeks.

Quarterly Earnings Exceed Forecasts

For the third quarter of 2025, KAR Auction Services posted compelling financial results. Adjusted earnings per share (EPS) came in at $0.35, significantly surpassing the Zacks Consensus Estimate of $0.30. This compares to $0.26 per share in the prior-year period. Revenue climbed 8% year-over-year to reach $498 million, a clear indicator of the successful execution of its digital strategy.

Should investors sell immediately? Or is it worth buying KAR Auction Services?

Auction fee revenue, a cornerstone of the digital operation, saw a notable quarterly increase of 20%. The dealer marketplace volume experienced robust growth, rising 14% compared to the same period last year. This contributed to a gross merchandise value (GMV) of approximately $7.3 billion, marking a 9% gain.

Strategic Digital Shift Yields Financial Benefits

The company's strategic refocusing towards a digital marketplace model is bearing clear financial fruit. Following the divestiture of its physical auction business, ADESA, the rebranded OPENLANE is now concentrated on its digital platform. This focus is paying off, leading management to raise its full-year 2025 adjusted EBITDA guidance to a range of $328 million to $333 million.

The Automotive Finance Corporation (AFC) segment is supporting this growth with a solid net return of 13.4%. Additionally, in November 2025, the company increased the limit on its Canadian receivable sales agreement from C$375 million to C$500 million. This expansion is expected to further enhance financing options for dealers and bolster digital transaction volume.